Total spending in the first eight months of the year rose by 13.1 per cent to $4,700 million while revenues totalled $2,900 million. Debt servicing increased by 8 per cent year on year and totalled $2,000 million, accounting for 53.7 per cent of budgetary expenditure.

The government’s hope was that the $3,100 million in soft loans pledged at last November’s Paris II meeting and the local banks’ subscription to $4,000 million-worth of zero-coupon treasury bills would bring down the deficit to 25 per cent this year. The government’s aim to generate $5,000 million from privatisation and securitisation encouraged the pledge of soft loans.

But despite all these measures, the government has not yet managed to control spending or substantially increase revenues. Attempts to privatise the telecommunications and electricity sectors have been delayed by political infighting.

One of the players to keep a close eye on the unfolding developments in Lebanon will be the IMF. ‘Even if the government secured $4,700 million from privatisation, the public debt will reach 130 per cent of GDP [gross domestic product],’ the IMF said in a staff report on the fiscal situation published in July. A fresh assessment of the situation is expected from the IMF in early October.